8) Third Party Beneficiaries Flashcards
3rd party beneficiaries: def
3rd party who will benefit from promisor’s action in a k
ojo! both parties can be promisors, of different things
3rd party beneficiaries: kinds
1) creditor beneficiary (intended)
2) donee b. (intended)
3) incidental b.
3rd party beneficiaries: intended beneficiary: kinds
(creditor or donee b)
3rd party beneficiaries: intended beneficiary: def
someone the k-ing parties INTENDED to benefit (often, but not nec, named in k)
3rd party beneficiaries: creditor beneficiary: def
promisee seeks performance from promisor to satisfy obligation owed to a 3rd party
3rd party beneficiaries: donee beneficiary: def
promisee seeks performance form promisor in order to make a gift of that performance to 3rd party
3rd party beneficiaries: incidental beneficiary: def
3rd party who will benefit from promisor’s performance as a practical matter, but not intended beneficiaries
3rd party beneficiaries: who can sue??
1) must be INTENDED (creditor or donee)
2) can only sue THE PROMISOR (not promisee)
3rd party beneficiaries: vesting of 3rd party rights: result
parties may no longer modify or rescind the 3rd party beneficiary provision w/o consent
3rd party beneficiaries: effect on modification
parties can only modify/rescind the 3rd party benefit provision w/o consent IF RIGHTS HAVENT VESTED YET
3rd party beneficiaries: vesting happens when:
1) beneficiary sues
2) b. changes position in justifiable reliance on the k
3) b. manifests assent to k (at request of promisor OR promisee)
4) rights of beneficiary have vested under express k terms
3rd party beneficiaries: defenses to promisor
any valid defenses promisor has ARE ALSO effective against 3rd party beneficiary (but must be from this transaction)
note! material breach is a
DEFENSE!
assignment vs offsets
obligor (?) can’t offset if knew about the assignment
is beneficiary INTENDED beneficiary? factors
: (1) whether the third party is expressly identified in the contract;
(2) whether the agreed performance runs directly to the third party; and
(3) whether the third party could reasonably rely on the contract as having been intended to grant a benefit to him.